D.C.'s Corruption Affliction

Ten years ago, The Post published an editorial, headlined " Dept. of Finance and Rigmarole" [March 6, 1997], that addressed the error-prone D.C. Department of Finance and Revenue and its boneheaded mistake in revoking the homestead and senior-citizen exemptions of nearly 5,000 homeowners. The department compounded the error by sending out whopping real property tax increases, which scared thousands of elderly residents half to death.

I often wondered whether that editorial had been too harsh on the city's tax office. But after reading that D.C. tax office employees have been charged with using phony paperwork to steal more than $20 million through illegitimate tax refunds, I'm convinced that the "Rigmarole" editorial was way too kind.

Read the 47-page sworn affidavit of FBI Special Agent Matthew T. Walsh, which was used to support search and arrest warrants issued in this case.

The sickening accounts of mail and bank fraud, money laundering, and other federal crimes allegedly committed by tax and revenue employees, along with other unidentified conspirators in that office, are all there.

What comes through most in the affidavit is the scope of the corruption.

The alleged scheme went beyond midlevel officials and the friends and relatives they cut in on the action. At least five other city tax and revenue employees were also included.

The FBI is still trying to determine the magnitude of the scam. Thus far, authorities believe it has generated dozens of fraudulent checks, with a financial loss to the District of at least $20 million. Special Agent Walsh said in his affidavit: "That amount may continue to grow as the investigation continues and additional fraudulent checks are discovered."

"Moreover," he said, "of that $16 million, less than $2 million in bank accounts have been located thus far." Amend that. The total now reaches at least $20 million.

In response to the federal charges, the District's chief financial officer, Natwar Gandhi, who oversees the tax office, has done some last-minute housecleaning, firing four senior officials for failing to detect the scheme, and he sent two other employees on administrative leave.

That's a start.

Tax office employees identified in the affidavit by the initials K.F., C.W., C.H., G.R. and S.J. also allegedly received money and gifts for their help. They, too, should be toast.

This kind of corruption, as Mayor Adrian Fenty rightly said, goes "to the heart" of the relationship between the D.C. government and city residents.